League of provinces president told finance dep’t. they are not living off gov’t ‘dole-outs’

POSTED: Thursday, June 26th, 2014

CALAPAN CITY – All provinces in the country are not living off national government “dole outs” and that the Department of Finance should just do its constitutionally mandated job of helping and supporting local government units in their finances.

 

This was the reaction of the League of Provinces of the Philippines (LPP) in the tax watch advertisement of the DOF and Bureau of Local Government Finance (BLGF), released June 18, which stated that bulk of the regular income of seven (7) out of ten (10) provinces in the country still comes from the national government.

 

In a statement released to newsmen the other day, LPP President and Oriental Mindoro Governoe Alfonso V. Umali Jr. said their Internal Revenue Allotments (IRA), being given by the national government, are constitutionally due them.

Citing article X, Section 6 of the 1987 Constitution, Umali explained the law simply means that the IRA are entitlements to each local government unit (LGU) to allow them to effectively and efficiently deliver basic and vital services to their respective constituents which were devolved by the national government to the LGUs when the Local Government Code (LGC) was enacted.

Umali added that instead of making the provinces and other LGUs the target of its shame campaign, the finance department should instead focus its attention on how to carry out its mandate under Section 6 of the Constitution that says LGUs should have a just share in national taxes.

LPP has constantly been advocating that the Bureau of Internal Revenue (BIR) stick to basic income in computing the 40% IRA share of LGUs, and not impose a number of deductions, prior to the computation.

It has also been strongly advocating for the inclusion of Customs duties and other national taxes in the computation of the IRA so LGUs could have a just share in national revenues.

Umali said that while it is true that Section 129 of the Local Government Code (Republic Act 7160) grants LGUs powers to levy taxes, fees, and charges, it likewise clearly sets the limits to the taxing powers of each LGU level, namely, the provinces, cities, municipalities, and barangays.

He also stressed the DOF and BLGF must understand that compared to cities and municipalities, the LGC has granted very limited tax base to the provinces, pointing out that “In fact, for some provincial LGUs, the taxes are not productive enough to allow them to raise revenues.”

For instance, RA 7160 limits the tax base of the provinces to real property tax (RPT); tax on transfer of real property ownership; tax on business of printing and publication; franchise tax; sand and gravel tax; amusement tax; professional tax; and annual fixed tax on delivery trucks and vans of manufacturers/dealers.

In the case of RPTs, whatever is collected is still shared among the province, which gets 35%; municipality, which gets 40%; and the remaining 25% goes to the barangay, Umali cited.

Umali also said a province loses its share in the RPT when a municipality previously under it is converted into a component city.(By JUANCHO R. MAHUSAY)

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